Sunday, 23 December 2012

Right to a Fair Opportunity on Probation

Christmas is time where some industries, such as retail,
become exceptionally busy. In order to meet customer demand employers take on
extra, seasonal staff. While some employers are upfront about the nature of
the employment relationship, others inform potential employees that they will
be employed on a trial, or "probationary" basis, and if things ‘work out’ they
may be hired on full-time.

This blog has previously considered the issue of what it
means to be on a “probationary period” at Ontario law in the post Probationary Periods and Notice .
This post will look at employers’ rights to terminate employees on probation
and employees’ rights to be afforded a fair opportunity to demonstrate their
talents.

Starting Point

As discussed in the earlier post, under Ontario law there is
no automatic “probationary period” in an employment contract. Unless the employer
specifically sets out to the employee in his or her employment agreement that
the employee will be “on probation” for a specific period of time and
what the implications of that probationary period will be (which provisions
themselves must not offend the minimum requirements of the Ontario Employment
Standards Act, 2000), the employment contract will be deemed to commence
without a probationary period. Therefore, simply telling an employee that he or
she will be “on probation” may not be sufficient to create the situation
desired by employers.

Right to a Fair Chance

Even if an employer does satisfactorily create a
probationary period, that does not allow an employer to terminate an
employee within that period simply because the employer wants to.

In June 1990, the plaintiff, Robert J. Mison (“Mison”),
applied for a position with the defendant, the Bank of Nova Scotia (the
“Bank”). In January 1991, the Bank offered Mison a senior position in its trade
finance department. Mison started work February 25, 1991. His employment was
terminated two weeks later on March 8, 1991. Mison is 43-years-old and a career
banker. (Para. 1.)

On the issue of whether the employment agreement had created
a probationary period Justice Epstein held that:

From the evidence it is clear that Mison was on
probation for the purpose of assessing whether he would fit into the Bank’s
organization. There was no need to test Mison’s technical skills but there was
a need to test his character. The net result is that the relationship was,
albeit in this limited way, provisional. Even though there was no uncertainty
about Mison’s expertise, there was a need to examine his ability to work within
the Bank itself. To this end, Mison assumed the risk, when he formally accepted
the Bank’s offer on February 15, 1991, of being involved in a less secure
employment arrangement for a period of six months. (Para. 40.)

Citing earlier cases from Manitoba and Saskatchewan, Justice
Epstein set out an employer’s right to terminate a probationary employee as
follows;

[A]n employer can only dismiss a probationary employee for
just cause. However, during probation, “just cause” can be based on a decision
that the employee is unsuitable for the job. Such a conclusion must be a reasonable
one and properly motivated. In addition, it is a conclusion that must be
reached after the employee has been given a fair opportunity to demonstrate
his ability. (Para. 43.) [Emphasis added.]

On the facts of the case Justice Epstein found that Mr.
Mison has been appropriately dismissed for cause. However, as required, she
also found that, were she wrong on the issue of cause, Mr. Mison would have
been entitled to one month of notice – or, more than the minimum amount
required by the provisions of the then Employment Standards Act.

Commentary and Takeaways

A probationary employee is an employee who, by the very
label, is one known to be with fewer rights. The first question, however, must
always be whether the employee is, truly a probationary employee.

Second, as mentioned, even if the employee is properly on
probation the next question is whether he or she was given “a fair opportunity
to demonstrate his ability.” In cases of exceptionally short service this
criterion will be questionable.

Finally, as Mison demonstrates, even if an employee
is on probation, unless the employment agreement specifically says so, the
employment relationship can only be brought to an end on the provision of
“reasonable” notice, not only statutory notice. (For the difference between the
two, and/or for more on wrongful dismissal see What is Wrongful Dismissal?)

If you are an Ontario employee and have been told that
you’re “on probation”, if your employer tries to end your employment without
providing you reasonable notice, it may be prudent to seek professional legal
advice; the employment
lawyers at Kelly Santini LLP would be happy to be of service to you. I can be reached by email at sbawden@kellysantini.com.

If you are an Ontario employer and are considering hiring
new staff, whether seasonal or not, it is always prudent, for a number of
reasons including probation periods, to use well-drafted employment agreements.
The employment
lawyers at Kelly Santini LLP have considerable experience drafting such
agreements and would be happy to be of service to you.

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As always, everyone’s situation is different. The above is not
intended to be legal advice for any particular situation and it is
always prudent to seek professional legal advice before taking any
decisions on one’s own case.